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Current MHR Stock Info

Magnum Hunter Resources (ticker: MHR) is an oil and natural gas exploration and production company active in three shale resource plays in North America: the Marcellus Shale, Utica Shale and the Williston Basin/Bakken Shale. The company’s growth platform is supported with approximately 350,000 net acres spread across its core operating regions.

In line with its planned non-core assets sale to streamline the balance sheet, on September 2, 2013, Magnum Hunter filed an 8K announcing the sale of non-operated working interest in approximately 51,495 gross (14,500 net) leasehold acres in Burke County, North Dakota to Oasis Petroleum (ticker: OAS) for $32.5 million.

The agreement, which includes 120 BOEPD of average production, is expected to close on or before September 27, 2013, and will be effective as of July 1, 2013. Based on the purchase price, Magnum Hunter Resources sold the properties for $2,241 per acre, or $270,833 per flowing BOEPD.

Other recent Bakken deals include Whiting’s purchase of 17,282 net acres (92% HBP) in Williams and McKenzie counties of North Dakota, and Roosevelt and Richland counties of Montana, for $260 million. Based on the purchase price, that transaction is valued at $15,044 per acre, $107,438 per flowing BOEPD, or $15.20 per proved BOE.

OAG360 Comments:  

Magnum Hunter’s non-operated asset sale in the Burke County, North Dakota is the first of several proposed non-core asset sales by the company.  Management is expected to announce a total of $200 million non-core asset sales in the coming months with proceeds dedicated toward the company’s debt reduction plan and development of the Magnum Hunter’s core operating areas in the Marcellus, the Utica and Bakken Oil Shale.  Wall Street greeted the news with great fanfare as investors pushed the stock up more than 6 percent to a new year-to-date high of $5.14.  Investors are expected to closely monitor the company’s progress and success as drilling results in the company’s Utica operations are expected before year-end.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.